Kickstarter raised almost $120m last year

Company's revenue around $6m

Benjamin Jackson at The Next Web has managed to scrape out some numbers from the crowd-funding site Kickstarter, and estimates the company has raised $119m in successful projects in the last year:

That’s almost three times as much as the amount raised during the company’s first two years. Taking into account Kickstarter’s 5% commission, we can estimate that the company took home just shy of $6m in commission revenue in its third year. And it’s not the only one cashing in: with Amazon’s commission of 2.9% plus 30¢ per transaction, the online retailer pulled at least $3m in fees during the same period.

Adding in the figures from last year, it looks like Kickstarter has helped raise a total of $159M since its inception.

Those figures also exclude any project fully funded but not yet completed – including the Pebble watch, the most successful Kickstarter project to date, which has raised over $6m already and has almost a month until its funding period is over.

Jackson also looks at what we can expect from Kickstarter in the future. It's back-of-a-napkin stuff, but if the company keeps growing at the apparently exponential rate that it is now, it will hit half a billion dollars raised towards the end of next year.

Two questions follow from this: Where now for Kickstarter, and what does this mean for the wider economy?

The number that jumps out at me from the Jackson's analysis is the profit Amazon is making for processing payments. Kickstarter is fairly strongly tied to the retail giant, which runs the only online payment platform that offers the ability to reserve, but not take, a payment. This is crucial for Kickstarter's model, since it relies on being able to guarantee backers that they won't be charged unless a project is successful, while ensuring that when the time comes to ask for the money, people pay up.

It must be sorely tempting to try to drive down Amazon's share of the revenue, but without any potential to switch to an existing competitor, Kickstarter isn't in a position to drive hard bargains. If it had a cash injection, developing its own may become a possibility – but even then, it appears to have higher priorities, like expanding outside of the US (anyone can back a Kickstarter project, but only American citizens can start one).

What about the other way round? Amazon has retail expertise, close ties with the company, and already runs most of its infrastructure (as well as payments, Kickstarter is hosted on Amazon's cloud computing platform). Could Kickstarter be an acquisition target? Maybe, but there is a risk of slaying the golden goose. Amazon already makes millions from Kickstarter for comparatively little effort; unless that money is at risk, Amazon would be well advised to sit back and rake it in.

More broadly, it may seem strange to talk about what a company through which "only" $100m passes annually – a rounding error in the American economy – but that isn't how Congress seems to view it. A key provision in the recent JOBS Act allowed Kickstarter, and companies like it, to give backers not only rewards, but actual equity in the companies they choose to support. The act was subject to a lot a criticism for these measures, including by supporters of the "crowdfunding" model, but even if the implementation was shoddy, there is no doubt that it reflects a broader trend. Soon, we'll all be venture capitalists – and Kickstarter will be the middleman raking in the fees.

The Pebble watch, the highest funded Kickstarter project to date.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Theresa May gambles that the EU will blink first

In her Brexit speech, the Prime Minister raised the stakes by declaring that "no deal for Britain is better than a bad deal for Britain". 

It was at Lancaster House in 1988 that Margaret Thatcher delivered a speech heralding British membership of the single market. Twenty eight years later, at the same venue, Theresa May confirmed the UK’s retreat.

As had been clear ever since her Brexit speech in October, May recognises that her primary objective of controlling immigration is incompatible with continued membership. Inside the single market, she noted, the UK would still have to accept free movement and the rulings of the European Court of Justice (ECJ). “It would to all intents and purposes mean not leaving the EU at all,” May surmised.

The Prime Minister also confirmed, as anticipated, that the UK would no longer remain a full member of the Customs Union. “We want to get out into the wider world, to trade and do business all around the globe,” May declared.

But she also recognises that a substantial proportion of this will continue to be with Europe (the destination for half of current UK exports). Her ambition, she declared, was “a new, comprehensive, bold and ambitious Free Trade Agreement”. May added that she wanted either “a completely new customs agreement” or associate membership of the Customs Union.

Though the Prime Minister has long ruled out free movement and the acceptance of ECJ jurisdiction, she has not pledged to end budget contributions. But in her speech she diminished this potential concession, warning that the days when the UK provided “vast” amounts were over.

Having signalled what she wanted to take from the EU, what did May have to give? She struck a notably more conciliatory tone, emphasising that it was “overwhelmingly and compellingly in Britain’s national interest that the EU should succeed”. The day after Donald Trump gleefully predicted the institution’s demise, her words were in marked contrast to those of the president-elect.

In an age of Isis and Russian revanchism, May also emphasised the UK’s “unique intelligence capabilities” which would help to keep “people in Europe safe from terrorism”. She added: “At a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty. We are leaving the European Union, but we are not leaving Europe.”

The EU’s defining political objective is to ensure that others do not follow the UK out of the club. The rise of nationalists such as Marine Le Pen, Alternative für Deutschland and the Dutch Partij voor de Vrijheid (Party for Freedom) has made Europe less, rather than more, amenable to British demands. In this hazardous climate, the UK cannot be seen to enjoy a cost-free Brexit.

May’s wager is that the price will not be excessive. She warned that a “punitive deal that punishes Britain” would be “an act of calamitous self-harm”. But as Greece can testify, economic self-interest does not always trump politics.

Unlike David Cameron, however, who merely stated that he “ruled nothing out” during his EU renegotiation, May signalled that she was prepared to walk away. “No deal for Britain is better than a bad deal for Britain,” she declared. Such an outcome would prove economically calamitous for the UK, forcing it to accept punitively high tariffs. But in this face-off, May’s gamble is that Brussels will blink first.

George Eaton is political editor of the New Statesman.